A little over a week has passed since a massive earthquake hit southwestern Japan, centered on Kumamoto Prefecture. Damage assessments and restoration work are progressing, and operations are gradually resuming at factories in the area.
However, there are some factories where damage was severe and no timeline for resuming operations has yet been established, or where operations have been suspended due to concerns about the stable supply of parts.
At a financial results press conference on Tuesday, Takanori Azuma, chief officer of Toyota Motor Corp.'s Accounting Group, said: "Human life comes first, followed by regional reconstruction, and finally restoring and reviving production. We are making decisions regarding operations cautiously, without compromising this order of priority."
Toyota temporarily resumed operations at its three factories in Fukuoka Prefecture on the morning of July 29, the day after the earthquake, but suspended them again that evening and scheduled them to remain suspended through Wednesday. At its plant in Aichi Prefecture, operations were suspended starting Monday and will remain so through Friday, partly to accommodate scheduled construction work on the production line.
Because automobiles consist of so many parts, even a partial disruption in the supply of components makes it impossible to produce finished vehicles. There are many factories handling auto parts in Kumamoto Prefecture, and after the 2016 Kumamoto Earthquake, operations were halted even at distant factories that had not been damaged. The impact this time is similarly widespread.
On Tuesday, Honda Motor Co. also announced that it would extend the suspension period at two plants in Saitama Prefecture and one in Mie Prefecture, halting production -- with some exceptions -- until Aug. 19. Nissan Motor Co., by contrast, announced that a subsidiary's plant in Fukuoka Prefecture, where production had been partially suspended since July 30, would resume operations on Thursday.
Since it is customary in the automotive business for people to take vacations during the Obon summer holiday period in mid-August, the full-scale resumption of factory operations across the entire industry is expected to be delayed until Aug. 17 or later.
Concern has also spread regarding the future of the semiconductor industry, which has a cluster of factories in Kumamoto Prefecture. However, so far, recovery appears to be progressing faster than it did following the 2016 earthquake.
On Tuesday, Sony Group Corp. resumed operations at its image sensor factory in Kikuyo, Kumamoto Prefecture. While it took more than three months to fully recover from the 2016 earthquake, operations are expected to return to pre-earthquake levels as early as mid-August this time.
Renesas Electronics Corp. also resumed production at its plant in Kumamoto City on Tuesday, and operations are expected to be fully restored within the month.
Mitsubishi Electric Corp. has been gradually resuming operations at its power semiconductor manufacturing plants in Koshi and Kikuchi in the prefecture since July 30. While the 2016 earthquake resulted in losses of approximately 8 billion yen due to problems such as damage to manufacturing equipment, the company said the damage this time is expected to amount to only about one-quarter to one-third of that figure.
Taiwan Semiconductor Manufacturing Co. (TSMC) also temporarily suspended production at its first Kumamoto plant in Kikuyo but returned to normal operations by Monday.
However, since semiconductor production processes are complex and the resumption of operations necessitates quality checks on finished products, there is a risk that new damage could be discovered. A source in the industry said, "While clustering related factories increases production efficiency, it also heightens risks in the event of a disaster, making it difficult to strike a balance."
Furthermore, at Nippon Paper Industries Co.'s Yatsushiro plant, where nine people died after the earthquake caused at least one chimney to collapse, the full extent of the damage has not yet been confirmed, and restoration is expected to take some time.
At a press conference following a Cabinet meeting on Tuesday, Economy, Trade and Industry Minister Ryosei Akazawa said, "We will do our utmost to minimize the impact."
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This article is from The Yomiuri Shimbun. Neither Dow Jones Newswires, MarketWatch, Barron's nor The Wall Street Journal were involved in the creation of this content.
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